The EU Commission predicts 2.2 per cent economic growth in the euro area this year, up 0.5 per cent on its earlier prediction.

Its forecast for the Republic, published in its Autumn Forecast report, is equally upbeat, with real Irish GDP growth predicted to rise by 4.8 per cent in 2017, moderating to 3.9 and 3.1 per cent in 2018 and 2019 .

That places Irish growth close to the top of the EU league with only Malta (5.6 per cent) and Romania (5.7 per cent) growing faster this year.

The commission does, however, warn of the distorting effects of multinational companies’ activities on Irish growth figures. “The activities of multinational enterprises continue to distort headline figures and complicate macroeconomic forecasts. The Government deficit is moving closer to balance but risks to the fiscal outlook remain.”

The uncertainty arising from the Brexit process makes trade predictions very tentative, the report says. Exports are projected to increase in line with global trade while imports are predicted to gather momentum on the back of strong consumer demand, leading to a moderation of the positive impact of net exports on GDP growth.

The general government deficit is projected to fall to 0.4 per cent of GDP in 2017, an improvement of 0.4 percentage points net of one-offs compared with the previous year’s deficit and reflecting the sustained pace of economic growth.

The report says that Ireland’s Budget 2018, which includes spending measures of around 0.4 per cent of GDP that are partly covered by revenue increases of 0.3 per cent, will still see the deficit fall to 0.2 per cent of GDP in 2018.

The commission has also raised its forecast for euro area growth over the next two years – to 2.1 per cent (up 0.3 percentage points ) in 2018 and 1.9 (up 0.2 percentage points) in 2019. The full EU is expected to grow 2.3 per cent this year.

The commissioner for economic and financial affairs, Pierre Moscovici, said at the report’s launch that: “After five years of moderate recovery, European growth has now accelerated. We see good news on many fronts, with more jobs being created, rising investment and strengthening public finances.”